Rizal Commercial Banking Corporation · PSE:RCB
Rizal Commercial Banking — FY2020 Earnings Presentation
31 slides from Rizal Commercial Banking's earnings presentation, 2021
Slide 1: Investor Presentation FY 2020
Investor Presentation FY 2020 1
Slide 2: Disclaimer
Disclaimer ANY INVESTMENT DECISION TO PURCHASE SECURITIES IN THE CONTEXT OF A PROPOSED OFFERING, IF ANY, SHOULD BE MADE ON THE BASIS OF THE FINAL TERMS AND CONDITIONS OF THE SECURITIES AND THE INFORMATION CONTAINED IN THE OFFERING CIRCULAR PUBLISHED IN RELATION TO SUCH AN OFFERING AND NOT ON THE BAS
Slide 3: Contents
Contents Economic Overview 1 Signs of a long recovery RCBC 2020 Review 2 Strong and resilient amidst the crisis General Information 3 Investment Information and Ownership Appendix 4 Historical Financials 3
Slide 4: Economic Overview
1 Economic Overview 4
Slide 5: Philippines seen to recover in 2021-22
Philippines seen to recover in 2021-22 2020 recession resulted in -9.5% GDP 2021 FORECAST contraction GDP growth rate Worst GDP decline recorded during the hard lockdown from March to May 2020 +5% to +6% . Recovery seen by 2022; but other industries may take more time to recover (e.g., tourism, prop
Slide 6: Data shows recovery from severe GDP contraction in 2020
Data shows recovery from severe GDP contraction in 2020 Philippine GDP growth improving from worst levels 6.4% 7.2% 7.5% 6.6% 6.5% 6.4% 6.1% 6.4% 5.7% 5.4% 6.3% 6.7% -0.7% -8.3% -11.4% -16.9% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019
Slide 7: The Bank expects recovery in 2021
The Bank expects recovery in 2021 2021 2020 2019 Economic Indicators Forecast Actual Actual GDP Growth 5.0-6.0% (9.5%) 6.0% USD/PhP (Year-End) 49.00-50.00 48.02 50.64 USD/PhP (Average) 48.50-49.50 49.62 51.80 Inflation (Average) 4.0%-4.5% 2.6% 2.5% BSP Policy Rate 2.25%-2.50% 2.00% 4.00% PSEi 7,500-
Slide 8: RCBC 2020 Review
2 RCBC 2020 Review 8
Slide 9: The Bank remained resilient in 2020
The Bank remained resilient in 2020 37.9B 5.0B 449B 536B 12.6% 16.1% Revenues Net Income Loans1 Deposits CET1 CAR +6% (7%) +4% +17% Profitability Growth Resilience Lower funding costs and higher 6th largest private universal bank in Generated USD 300M from the margins, boosted by trading gains terms
Slide 10: Accelerated Digital Transformation during the crisis
Accelerated Digital Transformation during the crisis 2020 BEST DIGITAL BANK in the Philippines BEST DIGITAL BANK MOST INSPIRATIONAL BRAND, 2020 ENTERPRISE BEST DIGITAL BANK IN THE PHILIPPINES FINANCIAL SERVICES CATEGORY INNOVATION IN THE PHILIPPINES 2020 Alpha Southeast Asia Asia-Pacific Enterprise
Slide 11: Migrated customers to digital channels
Migrated customers to digital channels RCBC well-placed to take advantage of the growing 1.14M shift to digital, with industry-leading digital channels and features. Digital Customers 9.0x vs 2019 15x QR Fund Transfers Bills Payments Increase in Mobile Mobile check deposit Remittances transactions v
Slide 12: Promoted Inclusive Digital Finance
Promoted Inclusive Digital Finance Through Diskartech and ATM Go, the Bank offers vital 1,800 financial and banking services needed by unbanked and underserved communities. ATM Go units in 72/81 provinces 3.9M Financial Inclusion Super App First “kapitbahay” (neighborhood) Diskartech app mobile ATM
Slide 13: Improved cost efficiency
Improved cost efficiency Business process re-engineering and Robotic Process 58% Automation shortens processing time and improves the customer journey while lowering overall costs. Cost-to-income ratio (from 61% in 2019) PhP 1.2B 61% of Branches to be transformed into Net cost savings from “Branches
Slide 14: RCBC is the 6th largest private bank in PH
RCBC is the 6th largest private bank in PH Assets Loans and Receivables 3,315 2,198 2,462 2,221 1,420 1,242 1,231 1,038 774 771 595 567 653 450 443 409 347 321 248 172 BDO MBT BPI PNB CHIB RCBC UBP SECB EW UCPB BDO BPI MBT PNB CHIB RCBC SECB UBP EW UCPB Deposits Trust Assets 2,611 1,629 1,798 1,717
Slide 15: Wide distribution network across the Philippines
Wide distribution network across the Philippines RCBC’s Branch Distribution by Region December 2020 CAR I: Ilocos 3 Region 14 6 II: Cagayan Valley III: Central Luzon 38 IV-A: Calabarzon NCR: Metro Manila 172 72 6 V: Bicol Region IV-B: Mimaropa Branches and Extension Offices1 447 VIII: VI: 6 Eastern
Slide 16: RCBC posted FY2020 Net Income of PhP 5B
RCBC posted FY2020 Net Income of PhP 5B 2020 2019 Change % Change INCOME STATEMENT Net Interest Income 26,281 22,368 3,913 17.5% Non-Interest Income 11,632 13,490 (1,858) (13.8%) Operating Expenses 22,045 21,797 248 1.1% Impairment Losses 9,375 7,397 1,978 26.7% Net Income 5,018 5,388 (370) (6.9%) B
Slide 17: Profitability remained stable despite high provisioning
Profitability remained stable despite high provisioning Profitability driven by robust core business and Sustained NII expansion, boosted by trading gains, tempered operating expenses led to higher Gross Revenues 7 6.7% 8% 6.4% 6.5% 5.8% 5.5% 37.9 6% 6 35.9 4% 22.8 25.1 26.5 5 2% 2016 2017 2018 2019
Slide 18: Core business sustained double-digit growth
Core business sustained double-digit growth Expansion in Net Interest Income due to better Higher net interest margin supported by lower margins and higher loans funding costs 4.31% 4.25% 30 % R = 14 4.06% 4.03% CAG 4.00% 25 20 2016 2017 2018 2019 2020 15 26.3 Growth in loan book1 propelled by SME a
Slide 19: Loan growth outpaced industry average
Loan growth outpaced industry average Diversified and high quality loan portfolio1 Healthy loan expansion despite industry slowdown remained resilient 11% 12% 457 5% 434 5% 139 132 -1% 2019 2020 Industry RCBC 72 79 9% Credit card business also grew despite industry decline 229 4% 238 Credit card Car
Slide 20: Diverse and stable fee-based revenue
Diverse and stable fee-based revenue Lower fee income year-on-year due to decline Diversified sources of fees in transaction volume and waiver of fees 6% 2% 5% 4% 8% 8% 44% 42% 16% 13% 4.2 3.6 3.8 3.5 3.4 24% 28% 2019 2020 Debit Cards (ATM Cards) Loans Deposit and Branch Trust 2016 2017 2018 2019 20
Slide 21: Championed Sustainable Finance
Championed Sustainable Finance RCBC is the first Philippine universal bank to issue green and sustainable financing instruments under global standards ESG rating AA RCBC Sustainability Bond PhP 8B (USD 160M) RCBC Sustainable Loan Portfolio 31 December 2020 RCBC Sustainability Bond Socioeconomic Sust
Slide 22: General Information
3 General Information 22
Slide 23: Investment Information
Investment Information Equity Profile Dividend History Credit Rating1 Dividends Pay-out Particulars 2020 Year per share ratio Ticker RCB 2020 0.56 20.00% Long Term Deposit Baa2 Issued shares 1,935.63M 2019 0.45 17.02% Senior Unsecured Baa2 Stock Price 18.88 2018 0.62 20.02% Bank Financial Strength B
Slide 24: Yuchengco Group of Companies
Yuchengco Group of Companies RCBC is a member of the Yuchengco Group of Companies (YGC), one of the premier business conglomerates in the Philippines. The Group is engaged in a wide range of financial and non-financial services. The synergies among these companies allow customers to access a wide ra
Slide 25: Ownership Structure
Ownership Structure Cathay Life Insurance, founded in 1962, is Taiwan’s largest insurance company. It is owned by Cathay Financial Holding, 23.35% one of the largest financial holding companies in Taiwan. Pan Malayan Management and 5.58% Investment Corp. (PMMIC) & 52.69% IFC is the largest global de
Slide 26: Comprehensive and Diversified Business Platform
Comprehensive and Diversified Business Platform RCBC RCBC RCBC Capital Rizal Forex Brokers RCBC Leasing International Corporation Micro Bank Corporation Finance1 RCBC Securities RCBC Investment RCBC Rental Corporation Ltd RCBC Bankard Services Corporation [1] RCBC International Finance is the Bank’s
Slide 27: Appendix
4 Appendix 27
Slide 28: Consolidated Income Statement
Consolidated Income Statement 2020 2019 Change % Change Interest Income 36,952 37,578 (626) (1.7%) Interest Expense 10,671 15,210 (4,539) (29.8%) Net Interest Income 26,281 22,368 3,913 17.5% Other Income 11,632 13,490 (1,858) (13.8%) Trading Gains and Forex 6,658 7,839 (1,181) (15.1%) Trust Fees 32
Slide 29: Consolidated Balance Sheet
Consolidated Balance Sheet 2020 2019 Change % Change Cash/Due from BSP & Other Banks 147,694 122,980 24,714 20.1% Investment Securities 88,065 160,719 (72,654) (45.2%) Loans (net of Interbank) 448,637 430,416 18,221 4.2% Other Assets 87,710 52,964 34,746 65.6% TOTAL ASSETS 772,106 767,078 5,028 0.7%
Slide 30: Consolidated Key Financial Indicators
Consolidated Key Financial Indicators 2020 2019 Change PROFITABILITY Return on Equity 5.5% 6.5% (0.9%) Return on Assets 0.7% 0.8% (0.1%) Net Interest Margin 4.3% 4.0% 0.3% COST EFFICIENCY Cost-to-Income Ratio 58.3% 60.8% (2.5%) ASSET QUALITY Net NPL Ratio 2.9% 2.2% 0.8% NPL Coverage Ratio 79.2% 79.0
Slide 31: Thank you!
Thank you! Investor Presentation FY 2020 31
Rizal Commercial Banking — FY2020 Earnings Presentation on 6ix